Under what circumstances can a Budget franchisee in Washington execute a release or waiver of rights under the Washington Franchise Investment Protection Act?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
A release or waiver of rights executed by a franchisee may not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, a franchisee in Washington can only execute a release or waiver of rights under the Washington Franchise Investment Protection Act under specific conditions. Such a release is permissible only when it is part of a negotiated settlement that occurs after the franchise agreement is already in effect. Furthermore, the franchisee must be represented by independent legal counsel during these negotiations.
This provision aims to protect franchisees from unknowingly or unfairly relinquishing their rights under the Washington Franchise Investment Protection Act. By requiring a negotiated settlement and independent counsel, the law ensures that any waiver is made knowingly and voluntarily, with the franchisee fully aware of the implications. This is particularly important given the potential power imbalance between franchisors and franchisees.
It also states that certain provisions that unreasonably restrict or limit the statute of limitations period for claims under the Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable. This further protects the franchisee from unknowingly waiving their rights.
This requirement is more stringent than in some other states, where waivers might be allowed more freely. Prospective Budget franchisees in Washington should understand these protections and ensure they have independent counsel if they ever negotiate a settlement involving a release of rights under the Washington Franchise Investment Protection Act.